Yahoo reportedly refused a USD 3.5 bln offer for a 15% stake in Alibaba Group from a group of investors led by Alibaba CEO Jack Ma in early 2011, two industry sources have told Forbes.

Forbes received a copy of the offer made in late 2010 via Neptune Investment Holdings, which was subsequently confirmed by a second industry source.

The offer, which valued Alibaba Group at USD 23.5 bln, was Ma's second attempt to buy back shares of Alibaba Group from Yahoo in the past 12 months. Ma told Forbes earlier this year that he did not trust Yahoo management.

Yahoo paid USD 1 bln six years ago for an approximately 40% stake in Alibaba Group, which is now estimated to be worth more than USD 10 bln.

Neptune's offer was comprised of nearly USD 2.4 bln in cash and USD 1.15 bln in financing backed by 120 mln shares of Alibaba Group (valued at USD 1.07 bln) from Ma and Alibaba Group CFO Joe Tsai.

Other participants included Shanghai-based strategic investment firm Fosun International (0656.HK), led by Ma ally Guo Guangchang; the Yunfeng Fund initiated by Ma, David Feng Yu, and Giant Interactive (NYSE: GA) chairman Shi Yuzhu; and other Ma allies. Alibaba and Fosun both declined to comment.

Alibaba Group could potentially be valued at USD 30 bln, assuming that Hangzhou-based C2C & B2C e-commerce site Taobao, which holds nearly 80% of China's e-commerce market, could IPO for USD 20 bln, and taking into account Alibaba Group's majority stake in Chinese B2B e-commerce company Alibaba.com (1688.HK), which has a market capitalization of USD 8.4 bln), control over Alipay, and potential data mining business. Given this estimate, 15% of Alibaba Group would be valued at USD 4.5 bln, USD 1 bln less than the Neptune offer.

Editor's Note: In Yahoo's investor meeting today, CEO Carol Bartz said that talks were ongoing between Alibaba Group, Yahoo, Softbank, and other major shareholders regarding compensation for the spin-off of third-party payment platform Alipay. For more information on this topic, please see "Alibaba Chairman Jack Ma Defends Alipay Deconsolidation Move," MD 5/16/11 issue.